If you live in a house older than 1978, the EPA has put into effect new lead based controls for almost all types of renovations.  This includes any job that contains sanding, window and glass replacement, soil, etc.

To protect against this risk, on April 22, 2008, EPA issued a rule requiring the use of lead-safe practices and other actions aimed at preventing lead poisoning. Under the rule, beginning in April 2010, contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and must follow specific work practices to prevent lead contamination.

To be in compliance, contractors must complete a lead based training and certification program.  If a contractor does not get certified or follow the regulations, they will be liable for fines up to $35K per incident.

For contractors, the license fee is $300.  The training program, however, is a lot more:

III. Provisions of the Final Rule

    This final rule revises fees for training providers, firms, and
individuals under the Lead-based Paint Activities Regulations and
establishes fees for training providers and renovation firms under the
Renovation, Repair, and Painting Rule. The Agency based these fees on
the cost of administering and enforcing the Lead-based Paint Activities
Regulations and the estimated cost of administering and enforcing the
Renovation, Repair, and Painting Rule. The fees in this final rule are
the same as those published in the proposed rule with one exception.
After consideration of the comments on the proposed rule, EPA decided
to assess a single fee of $550 for firms that apply for certification
under the Lead-based Paint Activities Regulations and the Renovation,
Repair, and Painting Rule on a single application in States where EPA
implements both programs. For Tribal government entities, the fee is
$20. The combined firm certification is explained in more detail in
Unit IV.D. Accordingly, EPA revised the existing fees in 40 CFR 745.238
for the Lead-based Paint Activities Regulations as follows:
    • Accreditation for initial training course--$870
    • Accreditation for refresher training course--$690
    • Re-accreditation for initial training course--$620
    • Re-accreditation for refresher training course--$580
    • Initial firm certification--$550
    • Initial Tribal firm certification--$20
    • Firm re-certification--$550
    • Combined lead-based paint activities and renovation firm
certification--$550
    • Combined lead-based paint activities and renovation firm
certification for Tribal firms--$20
    • Tribal firm re-certification--$20
    • Individual certification (for all disciplines except worker)--$410
    • Individual worker certification--$310
    • Individual Tribal certification (all disciplines)--$10
    • Individual re-certification (for all disciplines except worker)--$410
    • Individual worker re-certification--$310
    • Individual Tribal re-certification (all disciplines)--$10

    This final rule also establishes the following fees for the
Renovation, Repair, and Painting Rule:

    • Accreditation for initial renovator or dust sampling
technician course--$560
    • Accreditation for refresher renovator or dust sampling
technician course--$400
    • Re-accreditation for initial renovator or dust sampling
technician course--$340
    • Re-accreditation for refresher renovator or dust sampling
technician course--$310
    • Initial renovation firm certification--$300
    • Combined lead-based paint activities and renovation firm
certification--$550
    • Combined lead-based paint activities and renovation firm
certification for Tribal firms--$20
    • Initial Tribal renovation firm certification--$20
    • Renovation firm re-certification--$300
    • Tribal renovation firm re-certification--$20

The website estimates an extra $67-$167 per job, however, in talking with a major window installer these estimates are grossly under. For example a window replacement job on a house older than 1978 can cost 20-40% more. The reason being, all contractors have to be certified which is an expense to the firm, the containment of air born contaminants means far more taping and complete plastic covering of each window, the glass, paint, and stucco must be tested adding costs, each window has to be sealed labeled toxic and sent to a containment center that charges by the pound, and finally all material used has to be properly cleansed or discarded. A simple one day job can easily add five additional days of work due to the testing and extra containment requirements.

If you own a home older than 1978, be prepared for your renovation costs to be substantially higher.

As Tax day is upon us, we have seen the largest divide among people who pay tax and those who don’t.  More than 40% of Americans do not pay or owe any federal income tax largely due to the earned income credit and stimulus checks and programs.  So on the surface, you could say that the President has delivered on his promise to not increase taxes on individuals making less than $250K, however, what you don’t see is the new hidden taxes, fees, and increases regulatory costs that does have an impact on every American.

As with any political issue, you can almost spin a positive answer (or argument) in any direction depending on what you include and exclude.  In today’s tax environment, government programs are greatly increasing expenses while at the same time saying they are very unfunded.  This is not sustainable and the money to pay for the programs has to come from somewhere.

For better or worse, the rich can not support the entire nation, so the money has to come from the both the rich and non-rich.  The difference is this, the new taxes on the rich are advertised and seen as just, the taxes on the non-rich (due to vast opposition), are not advertised, in fact they are strategically hidden or classified as fees (such as California did to get around the complexities to pass new taxes).

Unless you are an expert in virtually every tax and fee assessed on every product or service, your taxes can go up with out you knowing it.

Here is a very good example of a tax that has gone up 41% on virtually any every person using Telecom services.

It is called the USF, look on your phone bill and you will see this fee.  From 2000-2008 it bounced between 9.5-11%.  Starting in 2009, it has gone from 11% to 15.3%.  A 41% increase.

If you spend $60 a month on telecom services, your tax went from $6.60 to $9.18.  See chart below:

USF Tax increase

Here is the next interesting fact.  The more tax collected, the total telecom revenues predictably decrease.  Why is this, simply, taxes assessed on businesses are typically passed to consumers.  In this case, the tax amount passed to the consumer could be the difference between affording the service and not affording the service.

There is a fine line between to much tax and not enough, but it is clear in the case of the USF we have crossed the threshold.

In the second interesting fact, you can see that the required support has substantially gone up which is inline with government spending increasing across the board.

USF Revenue and Collections

I find it hard to say with a straight face that taxes and fees have only gone up for the wealthy.  This is simply not the truth, but the media likes to spin it this way.  All facts above regarding the USF can be found on the FCC’s website in the quarterly filings that contain the rates and collections for the program.

It is important to understand, if government spending increases, everyone will pay the price.  If someone says otherwise they are lying, there is simply not enough taxable income on the wealthy to pay for all the program increases.

We should not focus our attention on rasing revenue, it should be focused on getting quality programs that help the people that truly need it and don’t waste money on programs that do nothing.  The USF is one of the biggest wastes of money.  Initially it was a good tax to help build phone lines to expensive areas, however, these areas are built and depreciated.  Assitance to companies should substantially be reduced, but as with any government program, companies and people get addicted to the subsidies and the programs never cease or reduce in size.

Less than a week after Health Care was signed into law by President Obama, we see a real and immediate impact. The impact is one that has Democrats scratching their heads and virtually demanding corporations to hand over internal documents. An impact that was not covered by the CBO analysis nor was ever mentioned by Main stream media. What is it? The cost of this bill to non-government entities i.e. you, me, and the corporations we work for.

The bill closes a “loop hole” that allows corporations to deduct the cost they pay to provide certain prescription drug benefits. No matter what you call it, at the end of the day it helped companies provide better benefits. Calling the deduction a loop hole does not negate that fact.

To clearly understand the impact better, when a company has more expense, less revenue, and has to hold shareholder value what things does a company do when offset the new burden?

1. Lay workers off to make up for the new expense.
2. Increase underlying product price.
3. Scale back future expansion.
4. Eat the cost and create lower shareholder value.

Every one of these options has an impact on the middle class. So sticking it to the corporations really means sticking to the middle class. You can be assured the executive compensation won’t be effected.

So, what has the middle class been sticked with so far:

ATT – $1,000,000,000
John Deer – $150,000,000
Boeing – $150,000,000
Caterpillar – $100,000,000
Prudential – $100,000,000
3M – $90,000,000
AK Steel – $31,000,000
ITW – $22,000,000
Valero Energy – $15,000,000
Goodrich – $10,000,000
Allegheny Technologies – $5,000,000

These are just the ones reporting this quarter. $1.6B gone from the balance books overnight. This is only one provision in the 2,000+ page bill, just wait to the other taxes and adjustments kick in.

It is one thing to know these costs are coming and fairly asses them, but the Health Care bill was sold as budget decreasing legislation with no impact on the middle class. One clause already disproves the claims. Also remember, these are corporations that pay high priced analysts to evaluate legislation, you the tax payer does not have the same benefit. Before backing legislation because “it sounds like the right thing to do” it is important to fully understand the impact and not dismiss views from either side based on political preference.

The things that people really want like pre-existing coverage, catastrophic coverage, and affordable options could be accomplished in less then 100 pages with clarity and measurable impacts. I don’t care what the news and legislators say, very few groups or people can analyze 2,000 pages of code and language and truthfully tell you what it all does and who it impacts. Something that changes every persons life should not be passed with “to really know what is in the bill we have to pass it” attitude (thank you for your most intelligent words Nancy Pelosi).

Before you believe the dire cuts claimed by advertisments and our law makers, it is always good to review the facts.  I was curious on trends in Per Pupil spending in California as well as what has our teacher base looked like over the last few years.  All I hear is massive cuts, layoffs, and less money to work with.

Here is what I found.  My source is ed-data.  The site takes the information reported by every school district in California to the department of education and summarizes the data in nice charts and demographics.  The nice thing about this site is that it is actual data and not put together with any agenda.  It is simply a partnership between the department of education, California, and the site to generate easy to read stats on our schools.  I encourage you to visit the site.

Here our some interesting facts.

School Spending from 2003-2008:

Dropout Rates: 2003-2007

Revenu/Spending

Staffing

Despite the messages from our media and legislators the numbers show the following:

-4,506 new teachers since 2003.
-Education spending has increased from $43B to $52B or 21% in five years.
-Per pupil spending has gone from $7,598 to $9,045. (All in costs including fees not in expenses as reported by EDU)
-15,951 new non-teaching positions added. (no wonder we can’t hire new teachers).

Even with a 21% increase in spending and 20K jobs added, the drop out rate has increased from 13.3% to 21.1%.

The truth is that we have added more money and not seen any noticeable changes. It is not the fault of the teachers or the condition of the schools. It is the system that is broken. Unfortunately our children are being used as pawns by the law makers and the unions to gain power and revenue. If they truly had the best interest of our children in mind, they would not defend every job, every paycheck, and every program. The workforce is over 600K jobs, there needs to be a way to reduce the dead weight in a fair manner. When dead weight is reduced, efficiency improves and pay goes up for everyone. We basically have a system that says if a job is not getting done by a group, instead of making cuts or holding that group responsible, you simply hire a new group to fix the problem while retaining the old group and the best part is that we the tax payers are ok with it.

I bet you could survey every school in California by the kids and get ratings on teachers that would give good insight into who should stay and who should go. Unfortunately we don’t trust our own kids. I can tell you in High School, we all new who the “kickback” teachers were. One teacher was so bad that 50% of the time he slept during the class. It was an English class and I only opened a English book twice. On the other end of the spectrum we had several teachers that did not follow the “criteria” and inspired debate and trust. The assignments were meant to inspire thinking and researching followed by group debate and discussions for all sides of an argument. They made an effort and to this day I still remember the classes, silly thing is, those two teachers were the teachers that the administrators punished. Why, parents complained the discussions were to advanced and off criteria. Amazing, no one complains about the teacher sleeping in class, but try to inspire thinking and all hell breaks.

What can we do? Demand reform and hold our representatives and administrators responsible. Tell the unions that while we agree that teachers are valuable and need higher pay be only if they can agree to ensure accountability and waste prevention. The argument has become so tainted that just by saying no against the schools puts you on the same ground as a convicted felon. The truth is, the majority of people (democrats and republicans) want our children to have a good education. I would even argue that most would want to pay teachers more if our tax burden was not so bad, but that can not happen until the system shows that there is not waste. Simply giving it more money is not a solution. We are smarter than that and should demand better of our representatives.

If you live in California, you have no doubt heard the advertising for Proposition 1a-f. You have also heard the large amount of advertising regarding school budgets, layoffs, and the dire circumstances our kids will be in if new taxes are not passed.

All the advertising, all the protests, and all the speeches by unions and democrats, have a common theme. More money is required or teachers will lose their jobs. Why do very few question this? If you do question this, how come you are instantly tarnished?

If California thinks that its most important jobs are teachers, then how come the leaders threaten to go there first to fix budget shortfalls? If you are running a company and have to cut costs, do you layoff your most important staff first? Off course not. The leaders and organizations who threaten our teachers should be the ones questioned. If they care, like they claim, they would find other methods besides raising the burden on California by waiving teacher layoffs at us.

The leaders are simply using scare tactics to push through agendas without accountability. This is why government policy should never be created from emotions. It is easy to say you support schools and pass every measure, tax the smokers, tax the rich, tax any other group not considered socially acceptable, and feel like you have done a good thing. Problem is, the parties responsible for running these programs have no accountability. If they mess up, if they produce poor results, if they run bad programs, the answer is simple, ask for more money. This is destructive to our economy, it is destructive to our society, and don’t think for a minute the schools students don’t see the flaws. We need accountability. We can have superior schools, improve drop out rates, and have programs that result in highly educated children with out massive budget increases every year. The goal of our leaders should be improving processes and education, not how to best position our kids to pass taxes and budget increases. The unions should stop worrying how to get more money and use their resources to help improve our teachers and run schools more efficiently. They should be protesting poorly run programs and not preserving every job no matter how poorly it is done or how irrelevant it is.

If accountability is established where bad leaders, bad teachers, and bad programs are weeded out. Efficiency will return, budgets will be reduced, and at that point higher pay and better benefits can be given because California will see a noticeable difference. As it stands today, the only thing California sees is more and more requests for money without any noticeable improvements. It is not a surprise California residents are starting to say enough is enough.

If you have not heard of Janet Napolitano, she is our current Homeland Security Secretary where in a recent interview she referred to terrorists attacks as “Man Created Disasters”. Her reasoning? She wants to move away from the politics of fear. Additionally, operations under the Global War on Terror are now to be called Oversees Contingency Operations.

I suppose we don’t want to offend any terrorists by calling them what they are. Unfortunately this is what the far left is best at. Taking any group they choose and turning them into a victim. What is hard to understand is why doesn’t anyone object? Why does the media latch on like a puppy that just learned a new trick. Really, it makes no sense.

When you feel that a wrong has been done to a certain group, the way our society fixes the problem is changing the reference. Why? It takes people’s attention away from the problem and directs their attention to something new. By doing this, injustices can slowly be forgotten and acceptance can begin. The question is, why do we want to forget what a terrorist is? Why do we want to accept their actions? And more importantly, what injustices do we think we have done?

It is important to understand that many of these large organizations base there ideology on radical religious beliefs. These groups have existed for hundreds of years and the only crime we have done is to exist under laws and freedoms they disagree with. It is not anything the Bush administration did, it is not the Fat Cats on Wall Street, and it is certainly not anything you or I did. It is one thing to take a strategy of ignorance and hope nothing happens on your soil, but it is entirely different to take a strategy that somehow reduces the immoral behavior of these groups and replaces it with a burden of responsibility for their actions. Given the speeches by Obama and the change in tone and terms, that is exactly the path we are taking. We are hoping that if we don’t talk about terrorism and apologize for being the big bad US that we will defeat the terrorists. It is unlikely. It only makes us weak and vulnerable.

One thing to consider, we have always been an open of forgiving country. Our land is filled with many different nationalities with all different religious beliefs. When people migrate here, they have the freedom to practice what they want and pursue whatever makes them happy without persecution. That is our strength as well as our compassion and forgiveness. Is that not proof enough of our intentions? Why must we apologize?

Today Obama signed into law the 2009 Omnibus Spending bill.  As mentioned in a previous post, the bill funds operations for many government programs at the cost of $410B.  Much of the spending is based from previous budgets, but this package does include increases in all programs with about $7B in earmarks.

The overall spending increase from the previous year is approximately 8% or $32B according to the Committee on Appropriations office.  This increase does not include the already identified funds from the Stimulus package which bring the entire spending to $680B.

House Appropriations Ranking Republican Jerry Lewis summarizes in this section of a speech he gave on the house floor:

“Mr. Speaker, like many of my colleagues, I’m embarrassed by this Omnibus spending bill and the process that created it. Even as the President talks about the need to put our economic house in order, this House continues to spend and spend and spend and spend. Clearly, this Congress has lost its way.

“Not one of the nine spending bills in this Omnibus was ever considered by the full House. Six of the nine bills in this package were never considered by the full Appropriations Committee. One more time we’re spending hundreds of billions of dollars with no debate, no amendments, and no Member input. Yes, clearly this Congress has lost its way.

“It’s now standard operating procedure that only a handful of Members in leadership are actually involved in writing significant legislation. That has been true with every supplemental spending package the House has considered over the last two years. That was true in the development of the $789 billion stimulus package passed by the House two weeks ago. And that is true once again today

“Under the rule just adopted, Members have one hour to debate $410 billion in spending with no opportunity to offer amendments. That equates to nearly $7 billion for every minute of debate. Sadly, the vast majority of our Members will have no voice in crafting this measure.

“The fiscal year 2009 Omnibus bill contains funding for nine out of the 12 regular appropriations bills—a total of $410 billion. The new fiscal year began on October 1st and today—nearly five months later—we’re jamming the work that should have been done last year into one massive, last-minute, “take-it-or-leave-it” spending bill.

“The spending in this legislation represents a $32 billion, or eight percent, increase over last year for the very same agencies and programs. With the exception of the spending boost after the September 11th attacks, this represents the largest annual federal government spending increase since 1978.

A little entertaining rant from Jim Cramer.  It will be interesting to see the wrath brought on by this.  Anyone defending “fat cats” puts themselves on the stake to be burned whether they make a logical point or not.  Right now, emotion controls our markets and policy and until that subsides, civil and logical debates will not occur.

The house passed the 2009 Omnibus Spending bill with heavy democratic support.  While this is a normal appropriations bill that usually comes in nine separate packages, this year all nine were wrapped into one and held through the elections in order to have a better chance of passing.  The problem is combined with the stimulus bill, the Omnibus spending bill substantially increases many of the Government programs to levels never seen before.

Wasn’t one of the problems of Bush massive spending problems?  Here is a summary of 2008 spending under this bill compared to the new 2009 spending levels when combined with the stimulus package:

This bill is being pushed through under the table and with little changes.  In case you are interested, here is a link to the earmark letters to this bill provided by the democratic appropriations board (be warned it is a large PDF 35megs).  35megs of letters for earmarks!

Shouldn’t a bill of this size be debated?

Senator Loni Hancock is currently leading efforts to change current regulation required for Budget approval from two – thirds majority to a simple majority. In a letter to her supporters, she says “The 2/3rds vote requirement and “The Pledge” held the Democratic majority in the State Legislature hostage for my entire term in the State Assemble. Year after year we have negotiated against ourselves about what to give up and give away to get enough Republican votes to reach 2/3rds. Year after year, budgets were late. In the end they were primarily based on cuts, accounting gimmicks and borrowing.”

No matter what side you sit on, changing our current policy in CA would prove detrimental to the tax payers of the State. CA for the past 50 years has been lead by a Democratic majority, while this may be a bad or good thing depending on the what side you sit on, one thing is certain. One party rule will corrupt no matter how good the intentions of the individuals are. We see it in businesses, we see time after time in government, and we see it in individual behavior. Senator Hancock claims that this will speed up the process which is true, but at what cost? The only reason CA residents know so much about their budget is due to the delay in getting it passed. Voters have an opportunity to asses and comment on the budget process. If you remove that and basically give the power to one party to simply push through any changes, you lose accountability.

California tax payers need views from all points because there are no easy solutions. A budget cut or tax increase are not always the answer not are tax cuts. The right answer is a sustainable budget that controls wasteful spending and taxes appropriately while allowing residents to keep as much money as possible. Anyone that thinks it is a good idea to hand a blank check to a group of politicians (republican or democrats) does not care about their own money or the health of the state. Politicians will spend every dollar given to them and making the process easier to distribute hard earned cash by CA residents only promotes wasteful spending.

I urge everyone to call Senator Hancock and voice your opposition. (510) 286-1333